Eastern Lubricants ties up with US-based Ergon to expand transformer oil business
Under the agreement, the two companies will jointly market, sell and distribute Ergon-brand transformer oil to government organisations across the country.
State-owned and listed Eastern Lubricants Blenders PLC has partnered with the authorised Bangladeshi distributor of US-based Ergon transformer oil as part of its strategy to diversify into higher-value speciality products.
According to a price-sensitive information (PSI) disclosure today (11 July), Eastern Lubricant signed a one-year agreement on 9 July with Premier Petroleum Products & Lubricants Limited (PPPLL), Ergon's authorised distributor in Bangladesh.
Under the agreement, the two companies will jointly market, sell and distribute Ergon-brand transformer oil to government organisations across the country.
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The company's share price rose 0.94% to Tk1,889 on the Dhaka Stock Exchange on Saturday.
Transformer oil is a specialised insulating and cooling oil used in electrical transformers to dissipate heat and provide electrical insulation, helping improve the safety, efficiency and lifespan of transformers. It is widely used in power generation, transmission and distribution systems.
The company said the partnership would enable it to supply internationally recognised transformer oil to government institutions, strengthen its position in Bangladesh's specialised lubricant market, and support its broader expansion strategy.
A subsidiary of the Bangladesh Petroleum Corporation (BPC), Eastern Lubricants is the country's only state-owned lubricant manufacturer, producing, blending, marketing and distributing automotive, industrial, marine and specialised lubricants.
The company has been seeking to diversify beyond conventional lubricants in recent years. Industry observers view the Ergon partnership as a significant step towards that goal.
Market analysts said demand for transformer oil is expected to grow steadily as Bangladesh expands its electricity transmission and distribution network. Major public utilities, including the Bangladesh Power Development Board, Power Grid Bangladesh PLC, Bangladesh Rural Electrification Board and power distribution companies, require transformer oil to operate and maintain electrical equipment. Securing supply contracts with these organisations could support the company's revenue and long-term growth.
The company, however, did not disclose the agreement's financial value, expected sales volume or potential impact on earnings.
Earnings rise, cash flow weakens
Easter Lubricant also reported stronger financial performance for the first nine months of the current fiscal year.
Earnings per share (EPS) rose to Tk28.64 in the July 2025-March 2026 period from Tk17.28 (restated) a year earlier. For the January-March quarter alone, EPS increased to Tk15.61 from Tk6.62 (restated).
Net operating cash flow per share (NOCFPS), however, fell to Tk34.77 from Tk57.68, which the company attributed to higher accounts receivable and increased cash payments to suppliers for product purchases.
Meanwhile, net asset value (NAV) per share rose to Tk162.91 as of 31 March 2026 from Tk139.60 (restated) as of 30 June 2025.
According to the company, higher base oil sales and increased non-operating income drove the improvement in earnings during the reporting period.
